Bank Transparency and Capital Adequacy Ratio: Empirical Evidence from Tunisia

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Author	Raoudha Dhouibi
ISSN	2307-2466
On Pages	9-20
Volume No.	5
Issue No.	1
Issue Date	March 01, 2020
Publishing Date	March 01, 2020
Keywords	Capital adequacy ratio, transparency, risk, capital determinants, Tunisian banking sector, GMM.

Abstract

This study analyzes the impact of bank transparency on capital adequacy ratio in a developing country. We introduce into the analysis a number of other variables deemed relevant by the literature to explain the behavior of the capital adequacy ratio. We used a panel data set that employs bank-level data from the Tunisian banking sector covering the period 2000-2014 and estimated the model with generalized method of moments (GMM). The findings of this study suggest that bank transparency, lagged capital and foreign ownership are positively correlated with capital adequacy ratio and managerial efficiency is negatively correlated with capital adequacy ratio. However, Tunisian banks do not take into account the level of risk in the determination of capital adequacy ratio.

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